iTunes, fone firms to pay 8% royalties

Agreement covers music sold over digital platforms

LONDON — iTunes and mobile phone operators O2, Orange, T-Mobile and Vodafone have reached an agreement to pay royalties to composers and songwriters for music sold over their various digital platforms in the U.K.

The settlement, which will see the technology companies paying 8% of gross revenues minus VAT, covers all digital music, except ringtones, on both online and mobile networks. A lower rate of 6.5% has also been agreed for non-on-demand services.

The three-year agreement amounts to a partial settlement of a case that is due to begin at the Copyright Tribunal today (September 28).

British record companies’ trade body BPI and collection society the MCPS-PRS Alliance, which represents songwriters, composers and music publishers, have both signed up to the deal.

The U.K. music download market is the biggest in Europe with sales of 34 million tracks so far this year, according to the Official UK Charts Company, already more than in the whole of 2005.